Blog Post

Net neutrality proposals cause friction in the European Commission, leaks show

It’s not only in the U.S. that net neutrality is under threat. In Europe, too, ISPs may soon be expressly permitted to charge content providers for carrying their traffic – but, as it turns out, this is causing divisions within Europe’s executive body.

The European Commission’s digital agenda chief, Neelie Kroes, said in June that she would propose the EU’s first net neutrality legislation, as part of a wider package of laws to promote a single telecoms market in Europe. On the plus side, she said the blocking or throttling of services on competitive grounds – a mobile network provider blocking Skype because it steals voice customers, for example – would be outlawed.

However, she also said ISPs would also be allowed to offer end users connections that come with a guaranteed quality of service. And what also came out in subsequent leaked drafts of the new legislation (which will be formally presented on Wednesday) was that ISPs will be – you guessed it – allowed to charge content providers to carry their traffic “with a defined quality of service or dedicated capacity so long as the provision of such specialised services does not substantially impair the quality of internet services.”

“Contrary to the net neutrality principle”

The digital civil rights group EDRI published a fresh leak on Tuesday: an opinion on Kroes’s proposals from the Commission’s justice department (DG JUST). And it gives a resounding thumbs-down to her net neutrality proposals.

According to the document, which DG JUST sent during a consultation period that ended on 26 July, the ability of end users to buy a broadband package with defined “general quality characteristics” is too vaguely worded, particularly as that term is not defined more tightly elsewhere in the new regulation:

“This raises concerns about the fact that ISPs could misuse their possibility to offer different ‘general quality characteristics’ to end-users, including by applying discriminatory traffic management contrary to the Net Neutrality principle.”

As for allowing ISPs and content providers to strike deals on prioritizing certain traffic, DG JUST seems to have precisely the same concerns as many net neutrality activists:

“Whilst supporting the principle that Internet users should have the right to subscribe to specific content and require a guaranteed transmission quality of the chosen content, we have concerns that, if not properly ring-fenced, the unlimited contractual freedom of content providers to agree on priority treatment of their content with ISPs will lead to unintended anti-competitive and discriminatory consequences in the medium-longer term.

“In particular, taking into account the technical limits to transmission capacity, it could raise barrier to entry to those competing content providers who might not be able to agree on the same level of commercial fees paid by those having obtained priority treatment by ISPs. Reduced competition at the level of content providers and, possibly, in the longer run, also at the level of ISPs as such, would ultimately lead to reduced content choice for Internet users/consumers.”

What’s more, DG JUST argued, introducing a two-speed internet could have a “negative impact on consumers’ freedom of expression and information,” as guaranteed in European law. And the “fundamental right to the freedom to conduct a business” could also be affected by the changes.

Waiting for the final version

DG JUST also suggested fixing other parts of the proposals, such as Kroes’s new push to end roaming costs within Europe. Kroes’s proposals actually roll back some of the terms of her own roaming law that was passed just last year, exempting operators who agree to cut roaming premiums within the EU from the need to decouple their roaming and domestic products, and DG JUST said there’s not enough justification “for changing such a recent policy decision”.

Now, Kroes’s team has been adamant that the leaked drafts reflect out-of-date versions of her proposals. It’s also been at least a month and a half since that DG JUST opinion was sent. So if the final package on Wednesday turns out to have incorporated these fixes, great – that’s what consultation periods are for. If not … well, let’s just say Kroes is in for an almighty fight.

It may well be the case that, in the current network build-out boom, there’s enough capacity going around that end users won’t have to care about these issues. But data use continues to grow at a hectic pace, and the situation may well change in the medium-term future. If the internet is to continue to give new startups the same chance that older firms had, then today’s policymakers need to get this stuff right.

UPDATE (6am PT): There are now reports that as many as 9 commissioners have issues with Kroes’s proposals. She could be in even more trouble than I thought.

UPDATE (8.15am PT): The proposals will now be published on Thursday rather than Wednesday, the Commission has said. It may represent a delay (waiting for the iPhone frenzy to die down?) but at least the Commission has agreed on the finalized text. Let’s now see what that text states — and remember, the European Parliament is next on the approval chain.

Breaking net nutrality is a very very bad idea, akin to your electricity company charging you more to use your oven than your kettle. If you are sold a given data plan, that is what the telco is obliged to provide, regardless of the source of that data.

Teclo’s already have a large advantage in that they can sell you a 10Mb plan and deliver you IPTV, but not have that IPTV stream taken from your 10Mb plan. They control the wire into your house, and so already have the means to differenciate themselves.

In many respects it’s like a phone company trying to bill you to receive calls, that’s crazy! Pay your line rental and you can receive calls, pay you internet subscription, and you can receive data.